We’re just dipping our toe into the travel optimizing pond here and I was a bit nervous. It required opening AND using a credit card, so if that makes you nervous, don’t do it. We had to be disciplined and used the card for most purchases and a few large purchases, like summer camp, to maximize points earnings.
Here’s what we did, as well as a few mistakes we learned from:
We both opened a Chase Sapphire Preferred card and spent the required $4,000 (each) easily within three months to earn 50,000 bonus points (each). Lesson learned: We forgot to have my husband use my referral code when he applied, missing out on 10,000 bonus points.
We set a goal: get enough points to get our family of four to the Bahamas or any Caribbean island over the week of Thanksgiving. Of the Chase rewards travel partners, Southwest was clearly the best option with the lowest amount of points required: I estimated 140k – 150k points for our family, however November travel dates were not released when we were planning.
Searched for the best deal: Southwest didn’t release their winter travel dates until May 31, so we knew we had to earn the required points by then. When the flights were available, we had 133,775 total points earned. I used Southwest’s low fare calendar to find the best combination of dates that would give us a 5- to 7-day Thanksgiving vacation with our points, but I kept coming up short.
Transferred points from Chase to Southwest: you can’t book Southwest through the Chase portal, so a points transfer is required. This was pretty easy. I transferred 73,000 Chase Rewards points to my Rapid Rewards account and it appeared immediately. I then transferred 60,000 of my husband’s Chase Rewards points to my Rapid Rewards account and when it didn’t appear immediately, I had a minor freak out. When transferring from Chase, you have to enter the cardholders name on the Chase site, plus a Rapid Rewards number. I used my husband’s name with my Rapid Rewards number and when the points didn’t appear, I assumed that using his name with my Rapid Rewards number was a big mistake. The Chase customer service was absolutely great and while we were talking through how to course-correct, the points appeared! I just needed a little patience.
Purchased additional Rapid Rewards: Since we didn’t have enough, I purchased 7,000 rapid rewards points for $134 to give me the points required to book our trip.
Booked it! It was a rather smooth process despite my human errors. Here’s the breakdown:
Earned Rewards: 133,775
Purchased Rewards: 7,000 ($134)
Total Redeemed Rewards: 139,776
Taxes and Fees: $463
Total: $597 = $149.25 each!
Versus Actual Costs: Flights: $3416.16 + Taxes/Fees: $664.16 = $1,020.08 each. We saved $870 each – that’s $3,480! There’s no way we would have or could have spent that. And these prices are already higher than they were when I booked just five days ago.
Another thing I learned from the Marla Tanner interview on ChooseFI is that you can, in fact, redeem British Airways miles through Chase. I tried to figure this out online and couldn’t, so thank you Marla for teaching me that you actually have to call the airline. I will keep that in mind, but I think we’ll stick with Southwest for now because our next travel goal is a rocky mountain ski vacation.
A huge thank you to ChooseFI for teaching us how to travel for less!
Filed our taxes via H&R Block and got fat federal and state returns (this probably means we need to adjust deductions)
Took federal return to pay off one card! WHOO!
Going for the Gold!
No one wants to stop spending. I haven’t found too many like-minded friends in my circle of friends. A co-worker is enthusiastically into FI, so it’s pretty awesome to share learnings and successes with each other. But among my close friends and family, it’s not spreading. I’m not exactly pushing it either. You have to be interested in learning and open to change. And breaking away from our consumer-driven culture isn’t something a lot people are interested in. People like to shop.
But, let’s pretend.
At this point, if asked, I would recommend the following books:
We’re nine months in and these are all common names to me now. There’s such a wealth of free information foranyone that wants it. It’s like we all have the ability to stretch this super muscle, but we don’t. It doesn’t have to be complicated, there are several simple changes you can make that make a huge impact. Anyone can do it!
We’re about 2 months into this journey to financial independence and we had an awesome month in June! We knocked out some serious budgeting, reduced bills where we could and made a serious debt reduction plan.
The fun stuff:
We’re tracking and budgeting with Every Dollar. I can’t say it’s any better than Mint because I haven’t used Mint as heavily. And now I’m too deep into it with Every Dollar to quit. From May to June we spent $7,000 less … WHAT? How is that possible? Home improvements in May: kitchen table, plumber, etc. We’ve only been in this old house a year, so home improvements are definitely a part of the budget for now. (OK. I spent too much on that table, but I love it and we’ll have it forever.) And we had to pay upfront for summer childcare for two kids – this means we won’t have childcare come out of our budget for 3 months. Despite those large expenses, we still came out of June having spent less on “stuff” and more on debt and savings.
Cutting R’s mobile phone data – using wireless where possible (home, office) and not letting the kids use it – cut the bill in half! From $104 to $49 per month! DING DING DING!
Credit card payments – the first one we’re paying off received weekly payments last month. Being our first full month, we weren’t sure what was going to shake out and where. Happily, we were able to make 3 extra payments! That debt pay off schedule is moving on up like … the Jeffersons. (I had to.)
Account consolidation: Definitely a work in progress. We transferred several 401k and IRA accounts from all over the place into Vanguard accounts. Phew. There were some seriously high expenses that I never knew to look for with other institutions.
With that … my fail. July has just begun and already I’m an FI failure! I spent way too much on a frame. That’s right. A frame. It’s a beautiful, old blueprint of our house and it was screaming to get out of the dusty tube and into a frame on the wall. And the architect was the great uncle of a good friend. That same friend who’s married to the person that introduced us. Pretty wild, right? But it’s really big, so … yeah, I’m justifying another big purchase. I promise I’ll be good for the rest of the month. Bring lunch every day, take the train vs drive and park. And perhaps less wine with dinner.
A colleague mentioned she was inspired by a financial independence book. Intrigued, I did some searching and found the FI community. Wow. I am encouraged and determined by this community and I have so much to learn. I wish I would have found this 20 years ago (I’m in my 40s) rather than doing what’s expected: college, debt, work 40+ hours/week, retire at 65. No, thank you!
My husband and I are committed to achieving this and sharing this journey and knowledge with our two kids (under 10). I’m still trying to work out our timeline: the point we don’t have to work. We’re about one month into this new mindset and just analyzing our budget, fully understanding where we spend and making short- and long-term plans has really jumpstarted this for us.
Our journey begins with 3 tools: education, debt reduction and saving more.
EDUCATION: It didn’t take much to get my husband on board, as I’m typically the spender for unnecessary stuff. There are so many great tools and resources. I started with the ChooseFI podcast – their Pillars of FI (episode 21) is the gateway drug. These guys are an amazing resource and have provided me with the resources I need to start on the path to FIRE.
DEBT REDUCTION: Armed with little financial knowledge, we’re starting with what we know we can do – it’s common sense – debt reduction. Between job changes, cross-country moves and buying (and filling) a new house, we’ve managed to rack up an embarrassing amount of credit card debt over the last decade and just haven’t focused on getting rid of it. It’s stupid, we know … so we’re getting rid of it ASAP. Based on the debt reduction tracker worksheet I found through Choose FI, we’re looking to have our credit card debt paid off by May 2019. That sounds so far away, but at least we have a plan and end date now. I’m 99% sure that we are underestimating how much we can pay each month and I’m certain that we will be getting all that paid off months sooner.
SAVING: Vanguard. It’s all over the FI community. I had no idea that I should be looking at fees or expense ratios. I already have 529s for both kids into which we contribute monthly and I opened an IRA into which I rolled over a Fidelity IRA, keeping a 401k with Fidelity. We’re going to keep our monthly IRA contributions low until we have the debt paid off. Then we’ll max it. HSAs … this little gem! I already had one and didn’t take full advantage. I’ve increased my contribution, lowering my income while socking away pre-tax earnings into an investment account. No brainer!
NEXT 3 GOALS:
Transfer both our Wells Fargo IRAs into Vanguard.
Better understand maxing out the retirement savings – I’m not clear on limits. I think its $5500 per year. Is that for IRA and 401k? I’m assuming that doesn’t include employee contributions.
Set realistic goals for 529 savings and our FIRE date.